World Bank Financing Dam Projects

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Table of Contents

Introduction
Main body
Conclusion
References

Introduction

Dams are considered by World Bank as an important source which contributes to the development of many countries. Large dams are believed to provide and progress power generation process, irrigation, domestic and industrial water supplies. These also provide security against natural disasters like droughts and protects from floods. But they also have their share of harmful effect. They submerge substantial land areas and alter the path of the river flowing downstream, which in certain instances cause significant undesirable impacts on the environment and on local communities.

Main body

Brief looks at the World Bank policies to set up a dam are for the following reasons, was to safeguard environmental and natural habitats, indigenous people, avoid involuntary resettlement, forests, safeguard the dams, creating projects on international water bodies or in disputed areas, and cultural property (BIC). The main aim of the bank in implementation these projects are to fight poverty and provide better living conditions. But in many cases, the argument has been raised that whether the bank has the best interest of the people in mind. For instance, a new project in Egypt will divert water from Nile to the reclaimed land in the West Delta region (BIC). But is it not changing nature? Further, the dam was contracted to large firms which are expected to leave the small firms behind increasing inequality.

World Bank along with Asian Development Bank introduced a $1.3 billion project in 2004 (World Bank). The Lao PDR dam project is expected to provide to a country which had pinned its hopes to the project which has an average income of US$320 a year (World Bank). The Bank provided a loan which had a partial risk guarantee for the project. This project is expected to help the Lao people and ensure reduction in poverty and environmental conservation.

Though there are existing controversies and debate regarding the project’s viability and benefit. Critics argue that the project’s implementation ideas such as “environmental and social impacts, resettlement, fisheries, downstream impacts, revenue management, conservation area protection plan, financing, compensation, and livelihoods” make it too big, too complicated, and/or too risky to actually induce he bank to go ahead (World Bank).

The already completed project of Nam Theun 2 was required to build a strong infrastructure for the country. The reason was the existence of poverty more than 70 percent of Lao people were under poverty on less than US$2 a day. Agriculture in the area was mostly dependent on slash-and-burn agricultural practice. The share of uneducated or did not complete primary school in the labour force was 70 percent. Around 40 percent of the people were malnutrition and and 1 in 10 will die before the age of 5. Accessibility to clean water was not available to more than half of the population.

Citing these reasons as the depiction of a requirement of a dam was presented by World Bank. According to the Bank, “Nam Theun 2 has the potential to deliver a significant and predictable stream of revenue that would have a very clear positive impact on national development.” (World Bank) The Bank believes that this project will not only affect the country social and environmental condition but also the overall macroeconomic and structural reform which are designed to endorse growth and improve the lives of Lao people. The adverse effects are expected to be Lao and Thai stakeholders, who earn their livelihood daily. This will have a downstream impact on fishing and resettlement Urooj Malik (World Bank). The key environmental concern is expected partial flooding of the Plateau to create a dam reservoir. The construction started on 2005 and is expected to finish on 2009.

Another dam which has been completed by the World Bank is the Kedung Ombo Dam which had been financed by the World Bank. (Rumansara). It was a $156 million of the project. This project was expected to provide irrigation and control floods. To get the site of the dam the World Bank is reported to have told the government to issue a warning to people living in the area of the dam that if they persistently stayed there they will incur losses. But when only a little more than 1000 households transmigrated, the dam’s doors were closed and they had to move.

As an initiation process to implement this project the Bank has asked the Government of Lao, to participate in a series of international workshops to discuss differing views of the project, based on volumes of research and analysis that are available as background. The World Bank’s main objectives of the Kedung Ombo Multipurpose Dam and Irrigation Project was to “increase food production, stimulate employment, control damaging floods, supplement water supplies, generate additional power, and improve water management” (World Bank). The specificities of the project included:

Building of the Kedung Ombo Dam;
focus was to improve active irrigation and constructing two new irrigation systems;
the project aimed at creating flood control caution and water examining system for the dam and irrigation operations; and
terms of technical assistance were provided as: “training in dam construction and safety inspection and in reservoir operation; design of irrigation works; surveys for updating classification of land for tax purposes to improve cost recovery; (iv) surveys for monitoring resettlement and compensation payments; and studies for soil and water conservation.” (World Bank)

The people of Kedumg Ombo mounted on a protest against the bank and the dam authorities. The anti-dam agitation was to get fair compensation from the dam authorities. The people of Kedumg Ombo received Rp. 250 to 300 (which are less than 15 cents) instead of Rp. 3000 and the whole project was falling short in compensation by $90 million. The government tried to move military to the dam’s site to stop student agitation. Later on the bank provided the villagers with their promised land value and was not displacing people from the site. The problem arose due to repressive resettlement policies of the government which failed to provide land for the site. This caused the problems as Kedumg Ombo and not in other projects in Indonesia.

A joint venture treaty of 1973 helped establish the Yacyretá Project between Argentina and Paraguay (World Bank). Before the sanction of the project loan, the dam site and the basic items of the project were established on 1979. From the initiation of the dam project, it was a difficult project for the World Bank as the project proposal failed to provide the inputs which were required by the Bank’s policies. Moreover, the implementation of the project was difficult due to the binational implementing agency (EBY). The project was divided into two components, first, there was a necessity of civil work consisting of two 40 meter high, five kilometer long concrete dams and 65 kilometers of embankment dam, and second the “environmental and resettlement activities” which were required to protect the people living near the dam. The agreement said that EBY had to flood the reservoir in stages, starting at 76 masl in 1994 and ending at 83masl in 1998. Presently even though the dam is completed, it serves only 60% of its operating capacity, as there are a number of resettlement and social activities which are yet to be done (World Bank).

The project has been facing certain environmental issues. The project authorities have been accused of causing the flooding of people who suffered from the severe hardships from flooding in urban creeks; believe that the flooding in the urban area was due to the reservoir. But the panel rejected the contention that the Dam was responsible for the urban creeks of Encarnación are flooding and causing severe hardship to the people. They believed that the Dam had no effect on the water level of the Paraná River at Encarnación, especially in times of flood. According to the Panel, the flooding in the urban creek was due to “upstream urbanization, lack of urban storm water drainage, and waste accumulation that impedes the flow of water in the creeks” (World Bank 2). Further, it was alleged that the flood made the drinking water in the area undrinkable. The Panel believed that the wells were polluted, but Yacyretá reservoir was not responsible for the flooding or polluting of the wells.

The Panel found that there were operational problems as per the agreement the dam should operate at 76 masl at Encarnación till the time the environmental and social compliances were done but the EBY operated the reservoir at a water level 1 meter in higher than the 76 masl limit, which does not agree to the legal agreements (World Bank).

The construction of the dam is believed to have created environmental pollution and severe health problems and that inadequate monitoring program are in place to detect this. The location of the dam was also under controversy as due to the drainage of the wastewater treatment plant. Further, the bank failed to comply with many of the World Bank compliances such as payment for re-settlers were not adequately provided for. In the Urban Creeks Program, the sequencing criteria by which people were moved was not made clear to people. Some settlers close to the dam had been adversely affected by the design and construction sites. Moreover, the hoist population was not adequately informed and discussed with regarding the building of the resettlement sites. The worst hit was the transmigrated people who had to wait for the resettlement when the project dragged for years. The dam authority was accused of being doing corrupt activities. It was believed that corruption was responsible for the proper management and implementation of the project.

Conclusion

To conclude we see that in all the three projects there has been violations, which has been accepted by the World Bank, of its environmental policies. But what is discerning is the fact that these problems continue to be a part of the World Bank projects. The report by World Commission on Dam’s (WCD) 2000 report, Dams and Development, which included 10 case studies and 100 technical studies across 125 dams has been criticized of exaggerating the of development activities, omission of the facts and biased account of the project (Bretton Woods project). From the review of the projects in Indonesia, Paraguay and Argentina, Thailand and Egypt shows that there has been a major failure on the Bank’s part to maintain social and environment policies that it upholds. This brings up the question of if the Bank has been participating in politicking the process of third world development? Even though the Bank stresses on the “the transformative role of large water infrastructure”, the benefits are yet to be savored.

References

BIC. “Environmental & Social Policies at the World Bank.” 2008a. Bank Information Center.
“New irrigation project in Egypt’s West Delta raises critical questions about the World Bank’s priorities in reducing poverty.” 2008b. Bank Information Center.
Bretton Woods project. “Dam wrong new World Bank book fails to convince critics of large dams.” 2008. Web.
Rumansara, Augustinus. “Indonesia: The struggleof the peopel of Kedung Ombo.” Fox, Jonathan A. and L. Dave Brown. The Struggle for Accountability. Hong Kong: MIT Press, 1998. 123-150.
World Bank. “Kedung Ombo Multipurpose Dam and Irrigation Project.” 2008. The World bank.
“Paraguay Reform Project for the Water and Telecommunications Sector (Loan No. 3482-PA) and Argentina-SEGBA V Power Distribution Project (Loan No. 2854-AR).” 2004. The World Bank.
World Bank Launches Workshops Around Laos Dam Project. 2004.

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World Bank Financing Dam Projects

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